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Over the past decade or so...
Large Structured Settlement companies have begun to be perceived as deceiving and manipulative; they are often accused of taking advantage of people in desperate financial situations. Though we might want to avoid broad generalizations, it is easy to see why this has become the common perception. Most people who have decided to sell their structured settlement payments or some other annuity are doing so because their situation has changed such that they now NEED more of their money. While it's possible that you might just want enough to kickstart your dream business or perhaps put a down payment on a home, many people have more dire concerns and truly need more income as soon as they can get it.
Any form of business that takes advantage of and benefits from the desperation of others is simply unfavorable. And it is entirely possible that you encounter Structured Settlement buyers looking to do just that. If you need to sell your Structured Settlement, your first priority should be finding a buyer who will always maintain your best interests. Large structured settlement companies have no incentive to do this, as they are already so large that they will get customers no matter what.
Companies like Fortune Settlement Solution rely on a different business model and therefore employ a different tactic. We won't take advantage of you, because we want you to get exactly what you need from this transaction. We are able to focus on each individual customer's situation more fully. Even more, we can analyze your scenario in a local context as it pertains to where you live.
Let's go over some aspects of selling your Structured Structured Settlement.
Protection Acts
Your structured settlement didn't work for you because you need your cash now. Maybe you want to invest or kickstart your life. Maybe you have a stronger need such as having lost your home. Structured Settlement payments were not the solution for you, but they have helped countless injured people.
They do, however, have a downside. Structured Settlements, as you may know, are an annuity that is owned by an insurance company and distributed to you periodically. You do not technically own the money in this annuity. The insurance company does. This means that if you want a larger sum of money from your overall settlement, there is no way for you to receive an instant infusion of cash. Periodic payments can be super beneficial but do not work well in the face of change. Most people have moments in their lives when they need to tap into their savings. Often you simply need access to the money that belongs to you.
You can't tap into your structured settlement and withdraw more money than your scheduled payments. To solve this problem, factoring companies buy the rights your unreceived structured settlement payments. They purchase your future payments at a discount and make an eventual profit when the insurance company continues to dish out the original payments.
This compromise allows structured settlement holders to access large lump sums when they need them.
As with any legal arrangement, there are federal regulations. Like we discussed earlier, this type of transaction lends itself to the possibility of a company taking advantage of you. The government aims to prevent this from happening, but as with anything else, they can only do so much as they cannot control business decisions of others.
In order to regulate these transactions to prevent those who have been injured from being exploited, the law demands a forty per cent tax on payment purchases like these if they are not made in accordance Structured Settlement Protection Acts, which are state laws. Lawyers and other professionals who are more familiar with your state's particular regulations will know how to help you better. All of these state laws establish that factoring transactions must be approved by a judge.
You as the structured settlement holder have to prove your genuine need for the money and further calculate the amount of the payment requested. Regulations for annuities and lottery winnings may vary, but a payee can’t just cash out of a structured settlement because he/she wants to take a nice trip, buy a new car, or indulge in some other luxury. To keep exploitative companies under control, state laws tend to require the transfer of settlement payment rights to be in the best interest of the payee that's you.
Luckily, the judge is on your side. And though exploitative companies are a dime a dozen, not every structured settlement buyer wants you to come out losing.
Luckily, Fortune Settlement Solutions is also on your side.
How does this work?
Like we've discussed, sometimes cashing in your structured settlement payments is your only option. Perhaps that 650$ monthly payment helped you with your early medical bills after your injury, but if you lost your job or encountered any life obstacle or unexpected event, a lump-sum payout is not only enticing, but it becomes necessary. Once the decision is made and you, the payee, gets started, you will be offered a sum upfront for your surrendering of your future payments accompanied by a discount rate.
I'll briefly explain a discount rate. You can compare the discount rate to interest you might pay on a loan, somewhere between 6 and 29 per cent. A lower discount rate, then, is a better deal than a higher one. Keep in mind that most structured settlement companies, at least those with no interest in taking advantage of you, always give you the option of negotiating and communicating further to come to the best possible solution. Basically, your initial offer and accompanying discount rate are not set in stone.
Let's say you accept a settlement purchasers offer. Fortune Settlement Solutions has given you a profitable, fair deal. What is next? Fortune Solutions or any settlement buyer will then petition the court in the insurance company's state requesting a transfer of the structured settlement.
Again, the judge is on your side and it is he who makes the final decision. Whether the company properly follows regulations and the specifics of your situation both play into this ruling. Keep this in mind and choose a Settlement Purchaser who guarantees getting court approval. Further, a company deeply familiar with your state's laws will be able to more properly manage your case. The state in which you live, which payments you request, and the size of the payments affect your eventual court approval. Your settlement purchasing company, whichever you choose, should make sure these three components are set up so you get court approval and your money! It is of course a bit more complex than this, but that is the gist of the process.
Depending on your state and county, the whole process from requesting your money to receiving it can take anywhere from 62 days to 90 days.
A variety of factors go into your lump sum amount, and people rarely sell the totality of their future payments. You may just sell your payments for the next 5 years if that is all you need for your current predicament.
As time passes by the factors themselves have changed and become more sensitive. Also, how exactly these factors play into your decision varies depending on your jurisdiction and the insurance companies of your state. For instance, if we think back to the 2008 crisis, some people worried that insurance companies who distributed their monthly payments would be insolvent and lose their money. This naturally leads to loads of people wanting to cash in their settlements. They tried to go through settlement purchasers to get their lump sum payout out of fear. We know not the dynamics and specifics of each individual's situation. But, we do know that judges wouldn't generally accept this fear as a good reason for cashing out; people with such fear were still, however, taken advantage of by larger structured settlement companies.
If fear is why you are cashing out, reconsider. We at fortune settlements will advise whoever calls, and we will likely recommend not selling if fear is your only reason. If, however, you wish to catapult your life forward with investment or simply desperately need the money, we are here to help. We will work countless hours to make sure everything turns out in your favor.
Call Fortune Settlement Solutions at (305) 690-0333 now with no obligations. Simply have a conversation to be informed and decide on your best option.
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